AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of National Guaranty Insurance Company of Vermont (NGIC). The outlook of these credit ratings is stable. NGIC is the captive insurance company of Waste Management (WM), a provider of waste management environmental services in North America. As part of WM’s Enterprise Risk Management (ERM) programme, the parent wholly funded the captive’s capitalisation through a demand note that generates met investment income to augment surplus annually. AM Best says the ratings reflect NGIC’s balance sheet strength, which it assesses as “very strong”, as well as its strong operating performance, limited business profile and ERM. NGIC’s surplus growth is “organic and “steady” as the company has been able to enhance its profitability over the past five years by reducing its underwriting expenses, according to AM Best. It has not had any losses in the programme. However, NGIC has an expense ratio that is higher than others in the surplus lines composite, due to the nature of the financial assurance line of business and expenses focused on its risk mitigation.
